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You no longer have to purchase the iPhone in person at an Apple or AT&T store to get up and running and activated. The at home activation process which the original iteration of the iPhone relied on has (finally) returned.

JG Mason of Gadgetell noticed a new ad on the AT&T website to buy the iPhone 3g. Confused, Mason decided to contact the AT&T sales specialist:

jon: Hello, if I purchase the iPhone online now, will I have to take it to an ATT store for activation?Kayla M.: Great question! I would be happy to help you with that today!Kayla M.: No, you will be able to activate the phone yourself by placing the battery into the phone.jon: that is a change correct? previously it wasn’t available online.Kayla M.: Yes, that is correct. It just became available online today.jon: wow, great. thanks. that is all i needed to knowKayla M.: You’re welcome. Thank you for choosing AT&T. Have a great day!jon: you too.

Uh insert battery? The iPhone has no removable battery. What is going on here? Apparently the AT&T rep had no idea what she was talking about here but one thing appears to be certain -- in home activation is now available. Mason followed up with AT&T and has received confirmation that in home activation really does exist and is available through AT&T. At the time of this writing Apple does not appear to be selling iPhones online for in home activation yet. Just AT&T.

While in home activation is great and all it does not bypass the fact that the iPhone from AT&T is still subsidized and requires a two year contract to purchase.

edit:

A further update says no in home activation. Just shipped to your house already activated after you have already signed your life away for a two year contract.

The device ships activated, but a customer must accept terms and conditions over the phone with customer care or online at att.com (which is the same process for other phones purchased online), after which he or she will simply sync the device with iTunes to use it.